This week of May 21-25 brings the release of three important monthly reports for the markets to digest. Of the three, only one of them can be considered highly important to mortgage rates. All of the releases are scheduled to be posted the middle and latter part of the week, therefore, expect today and Wednesday to be fairly quiet.
Thursday morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show an increase in new orders of approximately 1.0%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a smaller than expected increase, we should see rates improve Thursday morning.
April's New Home Sales data will be released late Thursday morning. This report, along with Friday's Existing Home Sales data, gives us a measurement of housing sector strength and future mortgage credit demand. However, these are the least important releases of the week and probably will not have much of an impact on mortgage pricing.
Also worth noting is the fact that the bond market will close early Friday afternoon ahead of the Memorial Day holiday next Monday. The stock markets will be open all day, but the early close in bond trading may put a little extra pressure on bond prices as investors protect themselves over the long weekend. The markets will be closed next Monday and will reopen Tuesday morning.
Overall, expect to see the biggest changes to mortgage rates the latter part of the week. Thursday's data makes it the most important day of the week, but we may see a noticeable change in rates Wednesday also as investors prepare for the week's only important news.
Best regards,
Michael-
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